Matt Trerotola: I think we’re certainly very excited about the Lima deal as well as some of the really important foot and ankle and technology deals that we’ve done this year. And it’s definitely been a better environment in terms of being able to get better valuations on acquisitions as you’ve seen, as we’ve shared the kind of multiples that we paid for those deals. So we feel like we’ve taken advantage of this period of time where it’s a little more of a buyer’s market, and we had the firepower and we’ve made some great strategic moves for the company. M&A is going to continue to be a part of our strategy. But clearly, for the next year, we’re going to be primarily focused on continuing the integration and ramp of the foot and ankle acquisitions that we’ve made, making sure that the Lima acquisition integration is a tremendous success.
And I would expect very likely that any acquisitions that we do in the next 6 to 12 months are smaller strategic acquisitions versus anything of any scale and size. At the same time, we’re constantly doing the strategy work to prioritize where else we’d be interested to make acquisitions, whether it’s things that strengthen and accelerate strategies in our core markets, or whether it’s things that would move us further into attractive other attractive ortho markets, or whether it’s things that would move us into attractive adjacencies that would be logical for us. And we have a little bit of firepower over the next year or so as we start to kind of bring back down our leverage, but probably less than around $0.5 billion-ish. And then in the coming years, we’ll build that back up and can certainly consider larger and attractive strategic moves at that point in time.
Operator: Our next question comes from Mike Matson from Needham & Company.
Mike Matson: Yes. So I guess, first, given the number of acquisitions you’ve done in recent years and the upcoming close of the Lima deal, I imagine you’ve picked up quite a few implant product lines. Just wanted to ask about if there’s any plan to sort of try to rationalize some of those product lines over time and how you go about doing that? I know that these types of things — products tend to have really long life cycles, and it’s sometimes difficult because of the customer loyalty aspect to certain products but
Matt Trerotola: Yes. Yes, for sure, we’re taking a look at that. Now to be honest, until the Lima acquisition, the majority of stuff that we’ve done has not had much product overlap. The Mathys acquisition in our core Recon products was largely complementary, a little bit of product overlap, but largely complementary, and our foot and ankle acquisitions have almost all been kind of new and complementary additions. With the Lima acquisition, we certainly will get into an area where we’ve got a little bit more of product line overlap. We still like the complementarity of the technologies and product lines and geographic positions. And so there’s not a lot of geography and product line overlap, but there certainly will be opportunities to simplify the product line over time.
We’re going to — really from a — we’re going to focus on growth first, and really focus on how and where we can cross-sell and how we retain as much as possible the customers and channels. The cost efforts that we’ll take at the outset will be more around sort of combinations of the businesses and the back office and the businesses and processes. And then over time, we’ll be thoughtful about how and when we might be doing some simplification of the product lines that will scale us and make us — make our growth more cash efficient over time. But we’re going to do that with an eye towards making sure that we deliver very strong growth, first and foremost.
Mike Matson: And then as far as the Lima acquisition goes, we’ve done some modeling. And particularly, with the convertible debt having a bit lower interest rate than we originally kind of expected when you announced the deal. We’re coming up with sort of double-digit accretion in ’25 and beyond — EPS accretion, sorry. Does that seem reasonable?
Matt Trerotola: Yes. Very much so, Mike. And we even put, I think, some of that in our materials today. I mean, we expect accretion in year 1, and then meaningful double-digit accretion starting in year 2.
